There Will Be No Double-Dip Recession

[No DUplicitous DUpe]

There Will Be No Double-Dip Recession
(posted with permission from: http://economiccrisiswritings.blogspot.com/2011/09/there-will-be-no-double-dip-recession.html)

What we face is far worse. The global economic system is crumbling and it will take down governments with it. Each of us will be impacted. "Taxing the rich" as the answer to U.S. problems won't happen. Rich and powerful people and their corporations control the government and fund the politicians who only raise it as an answer to get the support of voters who will never see it brought to realization. And it is only a distraction from confronting the real issue, which is the U.S., much of the Euro Zone and Britain are insolvent from their wasteful spending and their generous contracts with and bailouts of giant corporations. And as they fall, they will take Asian and other markets with them.

Is there a more optimistic scenario? Yes but it would take enormous backbone politicians have not shown. The U.S. for example would have to end all its wars, close its 1,000 global military bases and slash its military spending. It would also have to ask its people not to borrow and spend money they don't have to buy foreign made goods they can't afford but instead ask the cooperation of China and other creditors to help America reestablish U.S. production.

The liklihood of this happening is nill. So governments and Central Banks will continue to offer assurances, but as we just saw with the new pathetic U.S. Fed stimulus, they are out of good options. So in their insolvency, they make empty promises. The situation is so desperate, some large investors are buying U.S. T-Bills for their "safety" because they don't know where else to put their money.

The jobs and real estate markets will continue to tumble and social services will keep being slashed. If you haven't already done so, please take protective actions such as paying down your credit cards and reducing your overhead by selling whatever you don't use that costs you money to keep, such as a boat or an extra car. And if you still have a full-time job, cross train so you have more to offer your employer.

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For more economic information, please see "Markets Swoon on Recession Fears," The Wall Street Journal http://online.wsj.com/article/SB10001424053111903791504576587150257111860.html

[ixion]

1. "What we face is far worse."

exactly.

We're on the edge of something humanity has not faced in generations. Given the magnitude, perhaps something greater than any generation has faced. And the longer we pretend like it doesn't exist, the worse it will be when it becomes critically undeniable.

[Initech]

3. We need a whole new category to define this mess.

Recession? Depression? Nope this is something that'll topple governments. The rich get richer and we don't.

[tama]

10. Final depression

and end of capitalism as we know it.

Some of the governements toppled so far: Most of South America, Iceland, Tunisia, Egypt, Libya. More to come, much more.

Yeah, Iceland. Let's keep that example in mind.

[customerserviceguy]

2. Well, it will look like a recession

Until it looks like a depression. And I'm talking about the point of view of the economists who think there was actually a recovery, to many, many people (perhaps most), it looks like we never got out of the first one.

This author is really dreaming if he thinks the Chinese are going to sacrifice sales to help us rebuild our infrastructure. At least he also states the chances of this are "nill" (instead of 'nil'), so he has some grip on reality.

[No DUplicitous DUpe]

7. Thanks. I fixed that error in the author's piece..

(nill to nil)
Thank you for pointing that out.

[jberryhill]

4. Why pay down credit cards?

I don't carry any balances, but paying off a balance stated in X dollars, after a round of hyperinflation, sounds like a good idea.

It's the creditors that will take a bath.

[customerserviceguy]

8. That may work if you have fixed interest rates

and they stay fixed. Look for possible future administrations and Congresses to consider changing the credit card law that was a hallmark of the first two years of the Obama administration.

In the meantime, look for your creditors to come up with any possible reason to jack up your interest rate, including faking that they didn't get your monthly payment.

[FarLeftFist]

5. Or we could all just elect Liz Warren as President. Return to Democracy, Freedom, and Truth.

[rhett o rick]

13. I want whatever you're smokin.

Now why would our corporate overlords allow that? They gave us Obama, isnt that enough? At some point they will get tired of letting us think we have a democracy and just take total control.

The Revolution Is Waiting. Actually, I believe it's started.

[Skittles]

6. no double-dip because the first one never fucking ended

[area51]

12. +1 n/t

[coalition_unwilling]

9. Reactionary claptrap couched in alarmist terms. Governments are

most assuredly NOT out of "good options". There are many good options out there but governments are, for the most part, failing to utilize them.

For example, the U.S. government could bypass the private sector completely and start hiring the unemployed directly. As Keynes once noted, it is better for a government to hire an unemployed person to dig a ditch and fill it back in than to let the purchasing power of that unemployed person remain idle.

Instead, the author of this piece is like a teabagger gone berserk, proposing even more austere austerity than the most fervent IMFer has?

Ridiculously asinine so no surprise it comes from that vehicle of the ruling class, the WSJ.

[tama]

11. Real austerity

IMFers don't aim for real austerity, just robbing from the poor for the rich and more destruction of our planet.

We need real austerity, which means just waking up from the hypnosis of mindless consumerism. Living with our means, sustainably in balance with rest of the nature. "Austerity" of living in abundance, all basic material needs satisfied and also other needs, that are today most often left unsatisfied and directed to mindless consumerism.

[rhett o rick]

15. Wait just a min. "the U.S. government could bypass the private sector completely.."

Now how is that going to happen while the U.S. Government is owned lock-stock and barrel but the private sector? If you can see a way out of this mess, please share. I dont.

[coalition_unwilling]

18. I think there is some garbled syntax\proofreading problems in

your post, but the U.S. government is most assuredly not owned lock, stock and barrel by the private sector. At least not yet, although if Grover Norquist and Cheney had their way, the private sector would supplant the U.S. government.

[No DUplicitous DUpe]

16. The author responds to your comments...

With compassion, I would love to see the U.S. government hire the unemployed en mass not only to let them earn a paycheck to support their families but to help re-establish their self-esteem. And although unlike the 1930’s, the U.S. government is now insolvent, it could use the vast resources it now spends on wars, 1,000 global military bases and the military industrial complex to build weapons of mass destruction, fighter jets it doesn’t use, ships, submarines, tanks, helicopters, bombs, etc.

But the problem is the military industrial complex has been receiving vast stimulus every year since World War ll and to slash its expenses, something the President and Congress don’t have the backbone to do, would require laying off millions of well-paid people who are employed by military sub-contractors, all at taxpayer’s expense. So if that is not an option and it must not be because neither political party discusses it even in our time of economic crisis, than maybe our military industrial complex should hire the 14.5 million unemployed and the 10.5 million underemployed and the unemployed no longer counted for being unemployed too long. This would be consistent with the logic the writer of #9 is suggesting.

Unless America, with the support of its many creditors, can again ramp up its manufacturing base, a manufacturing base which pays taxes instead of absorbing them, perhaps by developing Silicon Valley new technologies, the U.S. and the globe is facing a financial Armageddon. Those creditors, starting with China, are already big Silicon Valley investors and they are all scared of the U.S. economy collapsing. For as we are seeing, our economy can’t be sustained by Wall Street money manipulation and by the middle class borrowing vast sums they don’t have to buy foreign made goods they can’t afford.

[Ikonoklast]

14. Yes, taxing the rich *will* happen.

Whistling past that graveyard will not stop it from coming to fruition, no matter how many right-wing rags are doing it.

Governments world-wide will not let themselves fall as long as there are sources of income to keep them going, and if the working classes are broke, guess who's left?

If Republicans think that the people in this country will sit still and silently starve while allowing the wealthy remain above it all, untouched, then they are truly ignorant of human history.

[sad sally]

17. From "Globalization and Progressive Economic Policy" - a worthwhile read

In the last thirty years, the economies of the world have undergone profound transformations. Some of the dimensions of this altered reality are clear: the role of government has diminished while that of markets has increased; economic transactions between countries have substantially risen; domestic and international financial transactions have grown by leaps and bounds (e.g. Baker, Epstein and Pollin, 1998: chapter 1). In short, this changing landscape has been characterized by the rise of neoliberalism, globalization, and financialization.

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Financial markets’ demands for more income and more rapidly growing stock prices occurred at the same time as stagnant economic growth and increased product market competition made it increasingly difficult to earn profits. Crotty calls this the ‘neoliberal’ paradox. Non-financial corporations responded to this pressure in three ways, none of them healthy for the average citizen: 1) they cut wages and benefits to workers; 2) they engaged in fraud and deception to increase apparent profits and 3) they moved into financial operations to increase profits.

Hence, Crotty argues that financialization in conjunction with neoliberalism and globalization has had a significantly negative impact on the prospects for economic prosperity.

http://www.peri.umass.edu/fileadmin/pdf/programs/globalization/financialization/chapter1.pdf?du